1. Field of the Invention
The invention relates generally to the field of accounting and business management tools.
2. Background Information
Currently there are many commercially available accounting and business management software programs such as accounting programs, spreadsheets and databases. However, the structures used by these software programs do not support the acquisition, storage, organization, analysis and planning of financial and non-financial business metrics to the extent needed by management, suppliers, creditors, shareholders, regulators, etc. As a result, multiple programs are used in an attempt to provide the information required. Still, a great deal of the information needed is not provided clearly and concisely and is not linked or compared with information sourced from the other software programs being used because of incompatibilities and other barriers.
One of the principle reasons current systems are not able to provide the information required is because the system architecture of all such systems is not designed to provide a global view of the company. For example, all accounting programs are organized based on a numbering system for a Chart of Accounts. Each Account in the Chart of Accounts is numbered and related accounts are nested. For example if all Asset accounts are numbered 100 to 199 than Cash and Cash equivalents might be 100 to 109 and Accounts Receivable might be 110 to 149, Inventory might be 150 to 159, and so on. The account number is used to describe the meaning of the data in the account. This limits the meaning to a single point of view. However, in business organizations there are many points of view regarding the financial and non-financial business metrics. For example, for financial accounting purposes under the GAAP rules, assets must be shown at the lower of their Fair Market Value or their Cost. Under U.S. tax rules, Assets must be valued at their cost minus allowed depreciation or amortization. Assume Company A purchased tradable securities for $100,000 in July and as of December 31st they still owned the securities but the market value is $75,000. Under the GAAP rules, the Company must write the $100,000 asset down to $75,000 and show a loss of $25,000 on the Income Statement. However, under the U.S. tax rules, the stock must remain valued at $100,000 since it had not yet been sold.
Accounting systems record only events that have already occurred and they record only financial information. However, managing the business requires a forward view that links the company's experience (the past) with its plans (the future). Financial information must be linked and compared with non-financial measures to really understand what happened and to effectively manage the Company's future. The architecture of accounting systems does not support a global view of the Company, nor does any other system now available.